Lowe’s in big step up in Canada with purchase of home improvement chain
Lowe's is making major moves in Canada with the $2.3 billion purchase of Rona Inc., a Canadian home improvement retailer and distributor.
Lowe's had previously made an unsolicited bid on the company more than three years ago, but the substantially higher offer this time around was accepted by Rona's board.
"We are very excited about this transaction as it leverages the strengths of two great companies, positioning us for continued success in Canada's over C$45 billion and growing home improvement industry," said Lowe's chairman, president and CEO Robert Niblock. "The strategic rationale of this transaction, for both companies, is very compelling."
“The transaction is expected to accelerate Lowe’s growth strategy by significantly expanding our presence in the Canadian market through the addition of RONA’s attractive business and excellent store locations across the country," added Niblock. "Importantly, the transaction also provides Lowe's with entry into Quebec, where Rona is the market leader and we have no presence."
Rona has approximately 500 corporate and independent affiliate stores under its purview, in addition to nine distribution centers.
Lowe’s Canada president Sylvain Prud’homme will oversee the new business in addition to the existing Lowe’s operations in the country.
The Canadian business will be based in Rona's headquarters of Boucherville, Quebec — moving its current headquarters from Toronto — and Rona will retain its multiple retail store brands, the majority of its current staff and executive team.
"We believe the time is right to take the next step in the evolution of the Rona family," said Rona chairman Robert Chevrier. "The team at Lowe's has presented us with an excellent plan that enables our company to maintain its brand power while at the same time leveraging Lowe's global presence to build upon and expand our reach. With commitments made by Lowe's to our employees, potential new markets for Canadian manufacturers and product offerings for our independent dealers, this transaction presents the ideal opportunity for the continued growth of our company while delivering an attractive premium for our shareholders."
Lowe’s Canada operates approximately 40 Lowe’s locations aside from Rona's network of 500 stores. The move is sure to amplify its position against Home Depot in Canada, which maintains 182 stores in Canada.
The combined company will also have revenues of $5.6 billion in Canadian dollars.
That's in addition to what Lowe's sees as C$1 billion worth of opportunity in the market. This includes: expanding customer reach by applying Lowe's expertise in certain product categories, such as appliances; enhancing customer relevance, utilizing Lowe's strengths as a leading omnichannel home improvement company and drawing on its customer experience design capabilities; and driving increased profitability in Canada by leveraging shared supplier relationships and enhanced scale, as well as Lowe's private label capabilities, in addition to eliminating Rona's public company costs. Given these opportunities, Lowe's believes there is potential to double operating profitability in Canada over five years.
Excluding transaction and integration costs, Lowe's anticipate the transaction will be accretive to its earnings in the first year following the close of the acquisition.
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Sephora pays more than lip service to mobile experience
Specialty beauty retailer Sephora is launching a new mobile tool that eases the process of selecting a lip color.
Sephora is now offering a feature called Sephora Visual Artist on its existing Sephora To Go consumer mobile application. Sephora Virtual Artist utilizes a smartphone’s camera to map a user’s lip location and shape using technology developed by facial visualization provider ModiFace.
Customers can then swipe through more than 3,000 lip colors by brand, format or shade, and instantly see how each one looks on their own lips. Using a 3D live view that moves with them like a mirror, consumers virtually try on the colors through an interactive digital overlay on their own lips.
The mobile color library is inclusive of all lipsticks and lip glosses available at Sephora. Customers can also filter results by their individual skin tone using the complementary in-store Sephora/Pantone Color IQ foundation, concealer and lip color matching technology.
Sephora Virtual Artist also includes special mobile features like Compare Me, which lets consumers see themselves in up to four different shades on one screen in a pop art style, and Shake it Up, which selects four new shades at random each time a user shakes their phone.
Furthermore, images can be shared socially to garner feedback from friends or emailed with product links for future reference. Products can be saved to a “My Favorites” list or instantly added to a customer’s basket for purchase.
Beauty products are an intensely personal purchase decision, meaning they do not always translate well to the digital customer experience. Sephora Visual Artist is a smart step toward more seamlessly linking the virtual and physical experience of trying on lipstick and lip gloss. The social aspect is an added bonus to make the mobile consumer feel more like they are in a store with friends.
“We know our clients wish they could try on every lipstick in our store. Now they can – instantly and effortlessly,” said Bridget Dolan, VP of Sephora’s Innovation Lab. “Our focus is always to launch technology that provides a true benefit to our clients. With Sephora Virtual Artist, our clients can have friends vote on which shades look best on them from wherever they are. We want to make buying lipstick more fun than ever, and maybe a little addictive.”
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Walmart expands omnichannel grocery offering in Canada
Walmart is extending the reach of its online grocery pickup service in Canada.
After initially launching online grocery pickup at 11 Canadian stores in July 2015, Walmart is now offering online grocery pickup at 12 more stores in the Greater Toronto market. Orders can be placed at six stores as of Feb. 3 with first pickup Feb. 9; while orders can be placed Feb. 18 with first pickup Feb. 23 at the remaining six.
Shoppers can select grocery items online and have them ready for pickup at their local participating Walmart store at a convenient time. They then pull into a dedicated online grocery pickup parking spot, call a dedicated phone line and their order is brought outside and loaded into their vehicle in minutes. There is a $3 fee and orders can be placed up to $21 in advance.
"We know Canadians are busy – busy parents, busy professionals, and busy families – which means they are also looking for ways to save time," said Simon Rodrigue, senior VP, e-commerce, Walmart Canada. "We are thrilled to bring the convenience of our online grocery pickup service to the Greater Toronto area to give our customers a convenient way to find what they need and save money. And best of all, when it's cold and wet out there, customers using this service don't have to leave their car to pick up their order.”
Walmart has offered similar “click and collect” grocery pickup at U.S. stores since March 2015, following a successful pilot the previous month. Click and collect has become increasingly popular in the grocery vertical, with Canadian supermarket retailer Loblaw as well as U.S. chains including Kroger and Hy-Vee offering click-and-collect options.
As mass merchandiser Walmart continues to try to establish itself as a leading player in the grocery vertical in both the U.S. and Canada, keeping up with the latest omnichannel customer experience trends will be a critical factor determining its success.
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